ISM PROJECT INTERIM REPORT

Motor Insurance

Prepared By:

Anshuman
Aparna Sharma
Imran Khan
Karan Tiwari
Siddhartha Patil

Dated
7/21/2010
 MotoSafe Inc.

1. INTRODUCTION

Insurance is a contract in which one party agrees to indemnify another for any loss that
occurs under the terms of the contract. A large number of persons agree to share the
loss which a few of them are likely to incur in future.

Functions of Insurance

Underwriting - The process of selecting risks for insurance and determining in

what amounts and on what terms the insurance company will accept the risk.
Claims – Seeking financial reimbursement for loss occurred.
Endorsements – Changes to policy document w.r.t risks covered, coverage
provided, duration, riders or special conditions
Renewal – Extension of policy for a different time period
Re-Insurance – Sharing of risk covered with other insurance companies

Role of IT in Insurance

With increasing complexities and competitiveness in the motor insurance business,

especially for high growth markets like India, insurance players have started investing
heavily into motor insurance software solutions. Though they have been successful to
an extent in taking care of their current needs, the same cannot be said about their
long-term needs and strategies.

IT systems enables companies to manage operational efficiency with business insight.

As a result, investments in the latest technologies available help these insurance
companies gain a competitive advantage by making themselves future ready.

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 2. PEST & SWOT ANALYSIS

SWOT Analysis

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

Conducting a SWOT analysis is an important exercise to enable one to see where one’s
business is in the marketplace and what strategies one can develop to increase one’s
market share

The SWOT analysis for MotoSafe Inc is:

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Strengths

Established Player – The company enjoys a favorable reputation in the market

and has a high trust index. The chances of default are low
High Customer Satisfaction – Delivering quality products coupled with good
customer service and after sales support increases the overall customer
experience
Innovative Product Line – New products developed to meet ever changing
customer requirements and dynamic market conditions
High Asset Base – Large number of assets under management translate to
higher trust factor and assurance

Weaknesses

Incorrect Premium Instances – Premium calculated was inconsistent amongst

same class of products with similar risk
High Premiums – Premium amount charged was higher viz a viz similar products
offered by competitors
Limited Target Group – Products were designed and/or offered to a select
category of people

Opportunities

Increased Awareness- Increased education and literacy levels have contributed

towards an increased awareness about the need for insurance and the various
products on offer
Untapped Markets – A 400 million + middle class segment provides immense
business opportunities and future growth prospects
High Growth Auto Industry Sector – The auto sector in India is amongst the high
growth sectors poised to be amongst the largest markets in the future

Threats

Increased Competition from PSU’s – By embracing IT as a change enabler,

Public Sector Units are becoming fiercely competitive
Entry of Newer Private Players – Entry of global insurance service providers in
alliance with local partners is changing the landscape of the domestic insurance
sector
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 IRDA Regulatory Changes – Policy changes by the regulatory authorities may
adversely impact current products on offer
Threat of Substitutes – Cheaper substitutes available from competitors may be a
major threat

PEST Analysis

A PEST analysis is a framework that categorizes environmental influences as Political,

Economic, Social and Technological forces. It is a useful strategic tool for understanding
market growth or decline, business position, potential and direction for operations.

olictical
Hike in FDI Regulation
Favorable regulation for insurance
Stable Government

conomic
Increase in Gross Domestic Savings
Increase in Spending Rate

ocial
Rise in disposable income
Changing Indian perception
Cars are being seen as a necessesity rather than a luxury

echnological
Automation of processes
Internet driven information era
Continuous business performance monitoring

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 3. DESIGN RATIONALE

The system has been designed keeping in mind the following points:

Automation

New products have better returns on development cost due to larger volume processing
in short time spans.

SWOT Analysis: This attribute builds on Strength by allowing for focus to be on

innovation rather than operational details.

Correctness

Human calculation error is eliminated. System logic determines correctness of premium

everytime.

SWOT Analysis: This attribute reduces Weaknesses by eliminating human calculation

error

Load Handling

Increased volume capacity leads to confidence in handling and processing more

policies arising out of operations in new markets and segments

SWOT Analysis: This attribute increases Opportunities by enabling the company to

consider wider range of customers

Centralization

Availability of data in a single, central location ensures consistency of data available to

all users. Possibility of redundant or inconsistent data is minimized.

SWOT Analysis: This attribute reduces Threats by enabling the company to be effective
and efficient in operations w.r.t competitors in the market.

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 4. SYSTEM OBJECTIVES

The objectives of the information system are:

Automation of Manual Processes

Information Sharing
Real Time Access
Tracking of Information Flow
Monitoring
Repository of Information

Automation of Manual Processes

The system should assist the functioning of the business by increasing the efficiency
and speed of business transactions.

Information Sharing

The system should enable ease of information flow between different departments and
people. Centralization of business information removes disparity and increases
effectiveness

Real Time Access

The system should ensure on-demand availability of data.

Repository of Information

The system should act as a central database of information thereby eliminating the
need for disparate, incompatible systems. The system should enable quick retrieval of
past data.

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5. E-R DIAGRAM

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